Euro Falls After French Private Sector Activity Contracts To Over 4-yr Low
24 Gennaio 2019 - 06:40AM
RTTF2
The euro declined against its key counterparts in the early
European session on Thursday, as a data showed that French business
activity contracted at the fastest pace in more than four years in
January.
Data from IHS Markit showed that the flash Composite Purchasing
Managers' Index fell to a 50-month low of 47.9 from 48.7 in
December. Economists had forecast a score of 51.
A PMI reading below 50 suggests contraction in activity.
The flash services PMI tumbled to a 59-month low of 47.5 from
49.0 in December. Economists were looking for a score of 50.5.
Nonetheless, the flash manufacturing PMI rose to a 3-month high
of 51.2 from 49.7 in the previous month. Economists had expected a
reading of 50.
Separate data showed that Eurozone private sector expanded at
the weakest pace in five-and-a-half years at the start of the year,
led by weaker pace of growth in both manufacturing and services,
defying expectations for further improvement.
The flash Composite Purchasing Managers' Index, or PMI, dropped
to a 66-month low of 50.7 from 51.1 in December. Economists had
forecast a score of 51.4.
Investors await the European Central Bank's monetary policy
decision, due at 7:45 am ET. Economists expect the key rates to
remain unchanged.
The main refi rate is at a record low of zero percent. The
marginal lending facility and the deposit facility are at 0.00
percent, 0.25 percent and -0.40 percent, respectively.
ECB chief Mario Draghi's post-meeting press conference is likely
to garner attention for any changes to forward guidance or any new
measures amid slowing momentum in the economy.
The currency held steady against its major rivals in the Asian
session, with the exception of the yen.
The euro dropped to 0.8688 against the pound, a level not seen
since November 14, 2018. If the euro extends fall, 0.85 is likely
seen as its next support level.
Having advanced to 1.1391 against the greenback at 8:30 pm ET,
the euro dropped to a 2-day low of 1.1340. The next possible
support for the euro is seen around the 1.11 area.
Reversing from an early high of 124.90 against the yen, the euro
weakened to 124.40. On the downside, 122.00 is possibly seen as the
next support level for the euro.
The euro slipped to an 8-day low of 1.1275 against the Swiss
franc, after rising to 1.1327 at 8:00 pm ET. The euro is seen
finding support around the 1.10 level.
The euro edged down to 1.5143 against the loonie and 1.6725
against the kiwi, off its early highs of 1.5204 and 1.6811,
respectively. The euro is poised to target support around 1.50
against the loonie and 1.66 against the kiwi.
The euro retreated to 1.5984 against the aussie, from an early
2-week high of 1.6038. This may be compared to a 2-day low of
1.5891 touched at 8:00 pm ET. Next key support for the euro is
likely seen around the 1.59 mark.
Looking ahead, at 7:45 am ET, the European Central Bank
announces its decision on interest rates. Economists expect the
main refi rate to be kept at a record low of zero percent and the
deposit rate at -0.40 percent.
In the New York session, U.S. weekly jobless claims for the week
ended January 19, leading index for December and Markit's flash
services PMI for January are scheduled for release.
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